Week In Politics: Changing Tax Code And Primaries

And jumping off this discussion of taxes and politics we turn to our regular political commentators, E.J. Dionne of The Washington Post and the Brookings Institution and David Brooks of the New York Times. Good to see you both.

E.J. DIONNE: Good to be with you.

CORNISH: So we currently have dueling tax plans out there, right? With Governor Romney stepping in today, but also President Obama and both Rick Santorum and Newt Gingrich, on the road, have talked about this. What's significant to you - and I'll start with you, David - about where this conversation is going especially on the Republican side?

DAVID BROOKS: Well, it's almost on both sides. You know, there's been consensus, I think, about a general approach. We've got to lower rates, but close loopholes. And that was in Simpson-Bowles. Notionally, Barack Obama's been for that. The Republicans are all for various iterations of it. The question is can you do it politically. Every president comes in office and say, yeah, I want to simplify the tax code.

Then, their aides say to them, you know, you'd have to violate this special interest, that special interest and then they all say, eh, maybe I won't do that.

CORNISH: Yeah, the devil's in the details, right? I mean, which loopholes do you close?

BROOKS: Right. And in the special interests who want to protect those loopholes, some of them not so special. So Romney is to be commended for a pretty big reform which has individual rates and corporate rates. The president has a much more modest, just dealing with the corporate rates, but they're both marching sort of in the same direction. I think eventually we'll get there, which is what the country needs.

CORNISH: I was surprised to see how similar these things are in a way. E.J.?

DIONNE: I think they're quite different. And I hate to break David's consensus, but not everybody agrees by any means that we need to lower rates, especially given how much we've cut taxes on the rich in the last 10 years. It strikes me that Romney's plan is announce you're cutting taxes on everybody, say you're going to close loopholes, don't specify exactly what loopholes you're closing or don't give much detail. That's not a tax plan. That's a 30-second ad.

Obama's plan is not as broad as Romney's. He's not talking about the income tax system. He's talking about the corporate tax system. And it is a plan and it makes choices. He gets rid of most loopholes. He lowers the rates, but keeps as much revenue coming in and he has one big preference for creating manufacturing jobs in the United States. Now, I happen to agree with that bias. You can argue about the details.

But whether you agree or not, it's something that you can actually argue about. Funnily enough, the Obama plan has at least something in common with Rick Santorum, who has proposed scraping taxes all together on manufacturing, which I don't think would work. But I do think the manufacturing bias is a good idea.

BROOKS: Yeah, I'm not sure too many economists agree with that. It's a good political idea, but not too many economists think you can make that distinction sensibly. It's a good idea. It's a sensible idea, the idea of lowering the rates and close loopholes, but the Obama plan is pretty small. Now, E.J.'s obviously right, that the Romney plan sort of talks about the candy, which is lowering the rates. He is, indeed, vague about how you're going to pay for all this.

And in that, he's joined by every single presidential candidate of both parties who's ever run. They don't want to say the obvious things, though he has talked about it in generalities, that basically you've got to cut deductions or cap some of them so that rich people do not get the mortgage interest deduction, maybe the charitable deduction. You've got to hit the rich and cap their deductions.

DIONNE: All I know is that when Obama proposed to cap deductions, some of those deductions for the rich, every Republican in the country attacked him. So good luck for that.

BROOKS: But Romney (unintelligible)

CORNISH: (Overlapping) I want to bring you guys back 'cause trust me, this conversation's not going away. Tax policy is not an easy one. This past week, we had what could be the final debate. Essentially, Rick Santorum was in the hot seat. For instance, we have a clip of him here on the subject of earmarks which he supported when he was in the Senate - some of which he supported in the Senate.

RICK SANTORUM: I do believe there was abuse and I said we should stop it. And as president, I would oppose earmarks.

MITT ROMNEY: I didn't follow all of that but I can tell you this. I would put a ban on earmarks. I think it opens the door to excessive spending, spending on projects that don't need to be done. I think there are a lot of projects that have been voted for - he voted for the Bridge to Nowhere.

CORNISH: The big insult: the Bridge to Nowhere and it still gets a lot of mileage out of that. Gentlemen, what happens with this debate?

BROOKS: Oh, they're both being ridiculous. Some earmarks are perfectly legitimate and that's the way you get legislation passed. And if you can't have earmarks it's going to be tough to pass a lot of things. And this is my basic problem with the debate and with Santorum's position. Santorum was a politician. When you're politician, as he says, it's a team sport. Sometimes you to vote for things you don't like 'cause your party needs you. You have to support people you don't like 'cause your party needs you.

You make compromises. And he made compromises and he's being attacked for it. I suppose it's normal, but we should expect that our people who play the game of politics are going to behave sometimes like team players. And we shouldn't castigate them for actually playing the political game. It's the craft.

DIONNE: It was such a narrowly tactical debate, the notion that at this moment in our history they spent all that time talking about earmarks. It was a dumb conversation, except when Newt Gingrich said you can't say mine are good and his are bad - he was addressing Romney. But I thought it was a very disappointing night for Santorum, partly because of the one-two punch of Mitt Romney and his new ally, Ron Paul. Santorum had to spend the whole night on the defensive.

CORNISH: Right, at one point Ron Paul looking at him and just calling him a fake to his face.

DIONNE: Exactly, and it was - I actually felt for Santorum during that. At least his answer on earmarks, it was long and it sounded like I was for earmarks before I was against them. But it was actually a pretty honest answer. But he had a terrible night and I think it bodes ill for him next Tuesday.

CORNISH: One other thing that came up in the debate I want to get to in just our short time here: the auto bailouts. We are rehashing this like crazy. And I want to get your opinion on that. Is it because this is an issue where you can actually score it in some way, a success or not? Sort of why is this still so contentious?

BROOKS: Well, it's a policy that is now popular, 57 percent think it's a good idea: I was against it at the time and now think it was probably a good idea.

The oddity though is Mitt Romney wrote a very good op-ed for The New York Times, which was a lot of what Obama ended up doing. But now to please the primary electorate, he's pretending he was completely against it. And so, it's an idea - another example of him hiding his virtues, in order to please the electorate which is more polarized than he is.

CORNISH: E.J.

DIONNE: Except that, as an op-ed by Steve Rattner, who was one of the architects of the bailout, pointed out today in The New York Times, Romney was against the one thing that made it work, which was the government money. The auto industry couldn't raise any money at that time to keep going, so the industry would've gone out of business.

And this is a rare case where a president can make a genuinely unpopular decision - and this was really unpopular - and look back and say, hey, guess what, I was right about this. This thing worked pretty much the way I said it would, maybe even better than I said it would. And I think it shows - I supported the bailout at the time because there are moments when capitalism can't make it on its own, and we would have been much worse off if all of those companies connected to the other industry, plus GM and Chrysler, had gone out of business.

CORNISH: And it's clear obviously the focus was on Michigan voters. We'll be back to talk with you guys about that next week. EJ Dionne of The Washington Post and David Brooks of The New York Times, thanks so much to both.